Sales and purchase agreement for Norgani Hotels signed

On 24 August 2010, Norwegian Property announced that its subsidiary, Oslo
Properties AS had entered into a preliminary agreement to sell its wholly owned
subsidiary Norgani Hotels AS. The buyer is Sech Holding AB, a company under
joint ownership and control by Pandox AB and Heches Holding AB, which is
controlled by Eiendomsspar AS and the Sundt family. The transaction comprises
the hotel real estate business of Norwegian Property, and is an important step
for Norwegian Property in creating a more focused company with a stronger
operational and financial platform for profitable growth.
 
As previously communicated, completion of the transaction was contingent upon
i.a. the parties agreeing a full board approved sales and purchase agreement,
completion of debt financing and approvals by relevant competition authorities.
These conditions precedent for closing of the transaction have now been
satisfied, and the parties have today executed an unconditional sales and
purchase agreement.
 
As previously announced, Norwegian Property has agreed to provide vendor
financing of NOK 600 million to the buyer, of which NOK 200 million will mature
after two years and the remaining NOK 400 million after five years. The vendor
financing is secured by first priority pledge in the Norgani Hotel AS' shares
and guarantees from Pandox AB and Heches Holding AB. Both tranches have a fixed
interest rate of 5% p.a.
 
Norwegian Property has an option until 31 December 2010 to purchase back a
minority share of up to 9.9% of the share capital of Norgani Hotels at the
buyer's cost price (including the buyer's costs in connection with the
transaction).
 
The commercial terms of the transaction are in line with the preliminary
agreement. Norwegian Property will see a cash release of approximately NOK
1,620 million, of which NOK 600 million will remain as vendor financing and NOK
682 million will be used for full and final repayment of the OPAS acquisition
facility. In the P&L accounts for the third quarter 2010, Norgani Hotels will be
accounted for as discontinued operations with a net result after tax of NOK -944
million.
 
Closing of the transaction will take place during November 2010.
 
ABG  Sundal Collier and Thommessen are acting as advisors for NPRO in connection
with the transaction.
 
For further information, please contact:
Norwegian Property ASA
CEO Olav Line +47 48 25 41 49 or
CFO Svein Hov Skjelle +47 93 05 55 66
 
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
 
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Source: Norwegian Property ASA via Thomson Reuters ONE